Product focus: Five year fixed rate bonds

Category:
Savings

Updated:
15/10/2010
First Published:
15/10/2010

MONEYFACTS ARCHIVE

This article was correct at the time of publication. It is now over 6 months
old so the content may be out of date.

Savers looking for a fixed rate savings account may have found themselves in a dilemma recently. Long term fixed rate bonds pay higher savings rates than short term deals, but carry the risk of leaving savers on an uncompetitive rate once base rate increases. Here is a selection of the current best five year fixed rate bonds, for savers who wish to make a minimum investment of £1 or more.

Birmingham Midshires – Five Year Fixed Rate

This five year fixed rate bond pays 4.60% on its anniversary, while a monthly interest option is available at 4.51%. Savers can invest between £1 and £10m and further additions can be made whilst the issue remains open. Early access to your money is allowed, subject to a penalty which depends on the term outstanding, as follows: up to five years, 365 days; up to four years, 320 days; up to three years, 270 days; up to two years, 180 days; and for one year or less, 90 days. The account is available to savers of all ages and can be operated by post.

Northern Rock – Fixed Rate Bond Issue 414

This five year bond from Northern Rock pays 4.15%. Savers can also choose the monthly interest option at 3.85%. Investments can range between £1 and £2m and further additions can be made whilst the issue remains open. However, early access to funds is not allowed. The account can be operated by savers of all ages by post only.

Nationwide Building Society – Five Year Fixed Rate Bond

The rate for Nationwide's branch based five year bond is determined by the amount deposited, as follows: for investments between £1 and £9,999, 3.75%; £10,000 and £24,999, 3.80%; £25,000 and £49,999, 3.90%; and between £50,000 and £2m, 4.00%. Further additions are not permitted but early access is allowed on closure of the account, subject to 365 days' loss of interest. The account can be operated by savers aged 7 and over, in branch only.